Here is another piece of evidence of the Prime Minister?s concern over environmental regulations impeding his emergency coal production plan. The Prime Minister?s Office has cleared a Coal India (CIL) proposal to augment production from two of its existing fields, despite the fact that a group of ministers (GoM) headed by the finance minister Pranab Mukherjee is seized of the matter.
An augmentation project ? stepping up output from an existing field ? usually takes several months to a few years to get the environment and forest clearances.
Allowing for a deviation from laid-down regulations, the PMO has directed the ministries of coal and environment to discuss the modalities of this clearance and complete the joint exercise in the shortest possible time so that orders for carrying out the coal augmentation project are issued immediately, an official told FE on condition of anonymity.
The approval has been given as an immediate measure to increase domestic coal production which is expected to register a mere 2% growth in current fiscal ? a scenario that could widen the demand-supply gap to an alarming level.?This (the projected level of increase in output) would fall terribly short of the energy requirements of an economy growing at 8-9%. So, there is an urgent need to step up production by exploring all available options,? said the official, involved in the process.
As per the decision, individual mines of CIL’s subsidiaries ? Mahanadi Coalfields and Eastern Coalfields ? will be taken up for augmentation of coal production. While the exact increase in production from these blocks is still to be finalised, sources said it could yield additional 40 million tonne, which is sufficient to fuel power projects with a combined capacity of up to 15,000 MW. This would be a significant jump as the total domestic production this year is expected to be around 600 million tonne and imports roughly 83 million tonne.
The import figure is expected to increase sharply over next few years because of a rapid growth in demand from consuming industries such as the power.
The government is concerned that coal shortage will derail the ambitious power capacity addition programme, under which the government intends to add 100,000 MW of capacity during the 12th Plan (2012-17). Heavy dependance on expensive imported coal also poses the danger of a spike in power tariffs.
In the last few weeks, the government has taken a series of steps to clear the impression that it is anti-industry. Under pressure from the PMO, the environment minister Jairam Ramesh has relented and given conditional forest and environment clearance to projects such Navi Mumbai airport project, Posco steel project, the Lavasa Lake City project and Chiria mining project of SAIL.
Several projects had gone into limbo after the environment ministry categorised the country’s coal-bearing regions into `go and no-go’ areas. This put a question mark on development of about 206 coal blocks with the potential to produce 660 million tonne of coal annually, enough to feed power capacity of 1,30,000 MW. The GoM will examine this issue, but the PMO wants other interim measures to step up coal production. The PMO arrived at the decision after a meeting of top government officials on January 31 to discus issues relating to the supply of coal to the power sector. Ministers of coal, power, environment and forests, along with the deputy chairman of Planning Commission, member (energy) of the Commission and the department secretaries attended the meeting.